Property agency Square Yards was fined for failing to draw attention to the risks of overseas property investments. (Photo: CEA)
Property agency Square Yards Singapore has been fined $7,500 by the Council for Estate Agencies (CEA) for failing to provide an investor with a written advisory on the risks involved in buying foreign properties.
In addition, the CEA also barred Square Yards from marketing or transacting any foreign property for six months, with effect from 1 March.
The investor bought a unit at a US hotel project, known as the Transhudson Project, through Square Yards in August 2014, following a seminar conducted jointly by the agency and US developer North Dakota Developments LLC.
North Dakota Developments, however, was charged for fraudulent activities in the US in May 2015. As such, the investor, along with two other investors who also bought units at North Dakota Development’s Transhudson Project and Montana Project, were unable to recover the US$112,279.50 they paid.
With this, the CEA advises consumers to exercise due diligence prior to entering into any agreement to purchase foreign properties.
“Buying a foreign property is a big investment,” it said.
“Given the complexities and risks involved, consumers should find out and understand pertinent information such as the foreign country’s rules and restrictions on property purchases and ownership, whether the property has obtained approvals from the authorities, taxes payable, pricing and terms and conditions of the purchase, the foreign property market condition, currency exchange risks, etc.”
Also, consumers should not “rely solely on the advice from representatives of the foreign developer”, it added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
